AT&T and T-Mobile - How the Merger Will Affect You

On Sunday March 20, 2011, wireless provider AT&T announced that it would acquire T-Mobile USA. The $39 billion agreement is the start of an acquisition process that will take about a year. When completed, AT&T will become the largest mobile company in the US, ousting Verizon from its current number one spot. Selfishly, my first thought as a Verizon customer was: How is this going to affect me? But I realized that whether you're on AT&T, T-Mobile, Verizon, or Sprint, you're probably wondering the same thing as me. So, what does this mean for a mobile device consumer?

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Increased costs First and foremost, pricing will most likely increase across the board. Verizon and the combined AT&T/T-Mobile will largely control the market, and therefore will not have to offer competitive pricing.

Decreased innovation With less completion, there will be less impetus to innovate. Smaller companies tend to offer broader selections of handsets at more competitive rates. In the past, T-Mobile took chances on new phone designs (like the G1) because it had a smaller market share but we may not see that kind of risk-taking going forward.

Improved service While thus far no specific announcements regarding changes to the networks have been made public, it seems very likely that if you currently subscribe to T-Mobile or AT&T you'll soon have improved voice and data service. However for wider coverage, AT&T will have to enable T-Mobile towers to work with current AT&T phones, and vice versa.

Increased phone options You'll have a larger choice of phones but I'm guessing that not all of T-Mobile's phones will be brought over to the new company.

No rate changes (not immediately at least) Good news, there will be no rate changes for any contracts signed before the deal is finalized. AT&T has said customers will be notified of any changes in rates or billing and that they will be made over time to smooth the transition. The billing period is one of the things you may see change as AT&T charges for the upcoming month, while T-Mobile charges for the past one. T-Mobile's unlimited data plan may soon become obsolete.

No changes While speculation rose that Verizon would think about acquiring Sprint, CEO Daniel Mead put those rumors to bed saying he has no such plans, and that "we don't need them." Chances are if you're a Verizon customer, you'll see few changes if any.

Increased innovation Sprint came out vehemently against the deal. It sees the merger as allowing a duopoly to control the telecommunications market. Sprint will likely try it's best to differentiate itself from the competition. It's priding itself on allowing a more open experience (where it allows users access to software and tools outside of its own) - like its new plan to integrate Google Voice. You can expect more innovation and experimentation from Sprint.

My advice to you? If you're happy, stay with your carrier and wait it out as the lasting effects of the potential merger are still not known. As the AT&T and T-Mobile slogans go, we'll see if they "stick together" to "rethink possible."